SINGAPORE — Lots of sharply contrasting stories swirl around the topic of Johor property.

There are those like 27-year-old Kylie Hung, who moved into a three-bedroom condominium in Johor Bahru seven months ago and is enjoying access to features such as a pool, butler service and a private beach. 

She currently pays about RM3,500 (S$1,000) a month for the mortgage and maintenance fees on her Country Garden Danga Bay condominium, and is happy with her purchase. 

But then there are those with regrets, such as Mr Eric Sim, who bought two four-bedroom units of 2,400 sq ft each near JB Sentral in 2014 as investments.

Prospects might have looked good then, driven by economic development and mega infrastructure projects such as the Kuala Lumpur–Singapore high-speed rail (HSR), but things subsequently went downhill. 

The onslaught of new projects raised supply above demand, the 2018 Malaysian general election culminated in a change in government and policies, such as the cancellation of the HSR project and the ringgit continued to weaken against the Singapore dollar. 

Mr Sim finally sold both units this year, incurring a loss of RM500,000. 

“It was the worst investment of my life,” he said. 

In addition to such anecdotes is a constant flow of news, both good and bad, about infrastructure and business developments in Johor. What is a prospective Singaporean buyer meant to make of it all? TODAY takes a closer look.

THE BIG PICTURE

Iskandar Malaysia comprises the Johor Bahru District, Kulai District and part of the Pontian District. Officially launched in 2006, it encompasses an area of 2,217 sq km, nearly three times the size of Singapore. 

Some of the major cities in Iskandar include Johor Bahru city centre, Iskandar Puteri (where Legoland is) and Pasir Gudang, one of the largest industrial areas in Malaysia. 

The launch of Iskandar was aimed at attracting international investments that would drive economic growth for the state.

Until recently, the piece de resistance of Iskandar was supposed to be Forest City, a colossal luxury real estate project on four man-made islands in the Johor Strait, overlooking the Singapore border. 

Launched in 2013, Forest City was envisioned as a futuristic, green, and smart city. It is Chinese developer Country Garden's largest overseas project, and was planned to house 700,000 people by 2035.

Despite its ambitious vision, the project encountered several challenges and controversies due to a mix of low sales, Chinese restrictions on capital outflows, border closures during the pandemic and public backlash against China's increasing influence in Malaysia.

In December 2023, CNA reported that only 15 per cent of the entire project had been completed. 

Notwithstanding the several stumbling blocks over the years, interest in Johor homes remains high among Singaporeans.

In January, for example, there was some hype over properties near Bukit Chagar — where the Johor Bahru-Singapore Rapid Transit System (RTS) Link station is located — after a commemorative ceremony attended by then-Prime Minister Lee Hsien Loong and Malaysian Prime Minister Anwar Ibrahim. 

But real estate experts told TODAY that rising inflation and property prices at home are the more important reasons driving Singaporean homebuyers up north.

WHY IT MATTERS

Six property agents TODAY spoke to said that while a significant number of Singaporeans are looking to buy Johor homes for investment, there are also those looking to live there or have a second home.

Experiences vary widely among those who have taken the plunge, which has made it difficult for some to decipher whether Johor property is a good investment.

Operations director Victor Lee, 53, and his wife Crystal Wang, 38, are among those with no regrets. When TODAY met the couple on May 15, they had just collected the keys to their two-bedroom unit at R&F Princess Cove, which they now call home.

Mr Lee said there have been promising improvements with regard to traffic on the Causeway, with both governments constantly making efforts to smoothen the travel process, such as the recent implementation of electronic gates. 

But some who entered the Johor property market 10 years ago did not see their investments bear fruit. 

A supply chain manager who wished to be known only as Mr Lee invested in a property in 2014: An RM1.7 million double-story cluster house in Horizon Hills.

“I expected to be able to sell my house within five years and make a profit due to capital appreciation,” said the 40-year-old. 

However, things did not go as planned. In his view, the launch of Forest City “killed the property market”. 

“There’s an oversupply of units because of the project. We did not expect the developers from China to come in that fast. If I were to sell now, I would be looking at a loss,” said Mr Lee. 

THE BOTTOMLINE

All things considered, is investing in a property in Johor a worthwhile investment? Property experts and homeowners advise prospective buyers to do their homework thoroughly before making a decision. 

Mr Sim, the former investment banker, said one should refrain from following investment trends without research.

“If I could turn back time, I would do a little more research on the economic activities in the area. I would also check the housing supply – not the number of units available at that point in time, but the amount of land and whether property developers would build more.

“If I had done my homework back in 2014, I would've found information that other developers had plans to go big,” he said, referring to Forest City. 

Mr Faizul of Far Capital stressed the importance of looking at a property in Malaysia through the lens of a local, instead of a Singaporean.

“When you use a Singaporean mindset to buy a property in Johor, it's suicidal,” he said, since the buyer may end up overpaying for their purchase. 

When investing based on the potential of future infrastructure and amenities, Mr Faizul also advised prospective buyers to be patient and only make the move when there is concrete movement for the projects.  

“Like the RTS, when you see movements from both governments, then you know for sure it won’t be cancelled. (Wait until things are) built first, instead of investing during the talking stage."